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Housing starts steadily climbing in Hardeeville

Gwyneth J. Saunders/Hardeeville Today More new houses are going up in local communities, adding to the increase in new construction permit applications.

Gwyneth J. Saunders/Hardeeville Today Land in Sun City North is being prepared for new houses.

Gwyneth J. Saunders/Hardeeville Today New housing permits issued by the staff at Hardeeville City Hall include homes at Hilton Head Lakes, Jasper Commons and Sun City North.

The housing boom is back in Hardeeville. At least that’s the indication from the number of new home permits issued last year.

In 2011, 148 permits for single-family homes were issued. That’s compared with 48 issued in 2008 when the housing market went boom and bust. But there were 129 new home permits in 2007.

How do experts explain what’s going on in Hardeeville and other communities similar to it?

Kim Kennedy, manager of forecasting for McGraw-Hill Construction, said things really peaked in 2005 and started declining in 2006. In multi-family housing, things peaked in 2006-2007.

“Basically that was the housing bubble and suddenly when that burst, housing prices declined, mortgages were harder to get and foreclosures increased. When the recession hit, the unemployment factor added to the housing market problems,” Kennedy said.

McGraw-Hill’s mid-year report for 2008 noted that new construction starts nationwide were down 11 percent, with housing bearing most of the decline that year. Single-family housing declined 28 percent in dollar volume — the dollar value of single-family starts — and declined 31 percent in dwelling units — the number of houses begun, according to the report.

Hardeeville, according to its numbers, bucked that trend.

The increases in Hardeeville are because of the growing population beyond the city’s core. While more than 100 permits were issued each year since 2008, nearly all were for homes in gated communities such as Hilton Head Lakes, Hampton Pointe — now known as Jasper Commons, Pine Arbor and Sun City North.

“People are moving into the area from somewhere else and have the money to come down here and build,” Hardeeville City Manager Bob Nanni said.

Hardeeville’s population was 1,793 in 2000. At the 2010 Census, the population had grown to 2,925 and is closer to 4,000 today.

Some of the new construction is for model homes in newer communities, but the rest of the housing starts are at the new homeowner’s direction.

“Before you go to building a new house you have that inventory of other homes on the market. There’s a lot of inventory that has to be wound down before we start to say it’s time to build new homes and the market returns to even pre-bubble, more like the early 2000s,” said Kennedy.

Matt Peebles, director of sales at Hilton Head Lakes on U.S. 278 is optimistic about more construction for the community that straddles the main artery between Interstate 95 and Hilton Head Island.

“We do have models being built now but we also have about eight new homes and more coming. We have two custom homes going up and seven other homes under construction or getting started,” Peebles said.

He said the community is way ahead of its sales projections from last year.

“Really the market has not come back nationally. When you get down to a small geography, such as Hardeeville, you might see some bounces up and down, but nationally, the market is just a whisper of what it used to be,” said Kennedy.

Paying for permits

New housing construction is a revenue stream for cities like Hardeeville.

Hardeeville city staff member Jane Crutchfield maintains and issues the housing permits and schedules. She also handles the inspection reports.

She uses the International Code Council Building Valuation Data to determine the required fees.

For example, a 2,000 square-foot one-story single family home valued at $129.98 per square foot has a total worth of $259,960. Based on the Hardeeville city ordinance fee schedule, the fees for that house would be $1,027 for the first $100,000 plus $7 for each additional $1,000 or fraction there of up to and including $500,000. The total fees would be $2,217. This is only for the foundation.

The building valuation data is updated every six months based and may fluctuate as the economy shifts.

The permit fees cover administrative costs and — more importantly — the required inspections for each stage of the house.

“They may not make the trip 18 times to inspect the new house,” Crutchfield said. “They may do five inspections then eight, then a few more each trip before they are done. And not all homes stop at 18 inspections. Most of them average 22-25 inspections as different stages fail for whatever reason.”

Any fees remaining go into the city’s General Fund, which is its operating fund.

“While new homes and businesses are the high priority, do not underestimate permits for remodeling and additions for residential and commercial as an indicator that the economy is ticking upward,” said Nanni.

As of late-January, Crutchfield had processed three permits for new homes, a number of residential additions requiring permitting and several more permit applications delivered to her desk.

“Certainly in the next five to 10 years it will come back. We still have high unemployment and high foreclosure rates and low levels of home sales. Things will return to the market certainly but it is taking much longer than anybody in 2005 would have guessed,” Kennedy said.